Annual installments for 10 years
City to pay $878K grant for complex near Shops
The city will pay an economic development grant of $878,000 to the developers of the office/apartment complex to be built adjacent to the Shops at Worthington Place.
The grant will be paid in annual installments of $87,800 for 10 years, contingent upon the offices generating $1 million a year in annual payroll.
Council approved the grant by a 6-0 vote May 20, despite council member Bob Chosy's comment that some of the contingencies are based on "a lot of hocus-pocus kind of thinking."
Developer Crawford Hoying plans to begin construction on the two buildings in the summer.
The grant is to be used on the larger of the two -- a six-story building with 140-150 apartments over 23,000 square feet of office space. It will face West Wilson Bridge Road, on the former James Tavern site.
A second four-story apartment building is planned for the northwest parking lot, adjacent to the mall. Fifty to 60 apartments are planned, with no office space.
The grant is to be directed at the office space in the larger building, according to the agreement.
Worthington currently has no office space that is considered Class A, a classification based on amenities and conditions. The offices being built are Class A.
Because of the cost of construction, Crawford Hoying would have to charge $18.50 per square foot for office rental space to meet its investment goals, according to city economic development manager Jeff Harris.
During the first quarter of 2013, the office-space rental rate on Wilson Bridge Road was $10.35 per square foot.
According to Harris, the proposed grant would permit the new office space to rent for $14 to $16 per square foot.
Contingencies include the office space being completed within 18 months and at least $200,000 in city income-tax collections to be generated from construction jobs during that time.
Within the first 36 months, improvements must be valued at a minimum of $16 million, and at least $1 million a year in payroll must be paid to people working in the offices.
Once reached, the payroll minimum must be met for each of the 10 years of the agreement.
Crawford Hoying also would be required to remain current on all real estate tax obligations, including service payments in lieu of taxes due.
According to a TIF that's being finalized, real estate taxes due to the city from both new buildings would be paid into a fund that would be used to make improvements to the Wilson Bridge corridor. Improvements include paving, utility realignment, traffic studies, signals and streetscape improvements.